Analytics: An Enabler to Health Plan Transformation

The Business Intelligence & Analytics for Healthcare

Conference & Exhibition

July 11, 2011 – 11:15 am

Presented by: Darren Taylor

Vice President, Enterprise Analytics and Data

Management

Blue Cross and Blue Shield of Kansas City

Agenda

– The Importance of Analytics

– Blue KC Focus Over Time

– Analytic Maturity – June 2010

• Data

• Organization

• Analytic Solutions

– Focus on Analytics – July 2011

• Organization

• Platform

• Result

– Conclusion – Guiding Principles

The Importance of Analytics

Health plans are faced with complex business and regulatory

opportunities that require effective use of analytics

Improve health outcomes and reduce cost to customers

Proactive management of medical loss ratios and risk adjustors

Identification of risk without traditional underwriting processes

Patient centered medical homes and accountable care organizations

Prove return on investment for health and wellness solutions

Consumer segmentation and direct marketing (B2C movement)

Exploration and execution of diversification strategies

Blue KC - Focus Over Time

1997-2003

• OLTP and Privacy

• Y2K

• HIPAA

2004-2010

• Data Management

• Data Warehouse

• Packaged Analytics

2011-2018

• Analytic Maturity

• Proactive/Predictive

• Data Mining

Blue KC Mission: To use our role as the

area’s leading health insurer to provide

affordable access to healthcare and to improve

the health of our members (est. 1997)

Analytics Maturity Model – June 2010

Project

Activity

Project

Mgmt.

Portfolio

Mgmt.

Service

Mgmt.

Localized

SolutionsEnterpriseStandards

Enterprise

Services

Running the business

Facts and data

Measuring and monitoring the

business

Information

Integrating performance

management and intelligence

Insight

Fostering business innovation and

people productivity

Knowledge

Creating strategic agility and

differentiation

Foresight

Ad Hoc

Solutions

Business

Enablement Stage 1

Operation

Stage 2

Improvement

Stage 3

Alignment

Stage 4

Empowerment

Stage 5

Transformation

Shared

Resources

Enabling

Technology

Organization

& Strategy

Program

Mgmt. and

Governance

June

2010

Data is an Asset – June 2010

6

Recognized as an industry leader for

Enterprise Data Warehouse

2010 TDWI Best Practice Winner – EDW Category

2010 Computerworld Best Practice Winner for

“Running the Business on BI”

2011 Computerworld Laureate Winner

Successful with data and BI, but dependent on

several external vendors for analytic solutions

Multiple Versions of Analytic Truth – June 2010

EDW

Single View of Data

“Award-Winning”

HEDIS

Group

Reporting

DM ROI

Predictive Risk

Cost and Use

Fraud and

Abuse

• Conflicting methods

• Duplicate functionality

• Multiple user interfaces

• Poor performance

• Low user adoption

• High cost approach

• Proprietary data sent

everywhere (even to

competitor subsidiaries)

Organization – June 2010

• Dedicated data management team in

place and operating for six years – great

• Decentralized BI tech team – not good

• Business accountable for own analytics –

good, but not effective

“If everybody’s accountable, nobody’s

accountable”

Analytics Maturity Model

Project

Activity

Project

Mgmt.

Portfolio

Mgmt.

Service

Mgmt.

Localized

SolutionsEnterpriseStandards

Enterprise

Services

Running the business

Facts and data

Measuring and monitoring the

business

Information

Integrating performance

management and intelligence

Insight

Fostering business innovation and

people productivity

Knowledge

Creating strategic agility and

differentiation

Foresight

Ad Hoc

Solutions

Business

Enablement Stage 1

Operation

Stage 2

Improvement

Stage 3

Alignment

Stage 4

Empowerment

Stage 5

Transformation

Shared

Resources

Enabling

Technology

Organization

& Strategy

Program

Mgmt. and

Governance

June

2010

Jan

2011

July

2011

Jan

2012

Blue KC - Focus on Analytics

Q3 2010

• Accountability

• Re-Organization

• Mission

• Guiding Principles

Q4 2010

• Business Plan

• Objectives

• Strategies

• Approvals

Q1-Q3 2011

• Delivery

• People

• Platform

• Results

Enterprise Analytics and Data Management Mission:

To deliver and enable credible, actionable analytic

solutions by integrating talented people, world-class

data, and superior technologies (est. 2010)

Organization – July 2011

Data Management

Data Integration

Enterprise Data Warehouse

Enterprise Data Governance

Analytic Solutions

Development of Analytic Solutions

Analytic Vendor Management

Analytic Solutions Architecture

Enterprise Analytics

Enterprise Financial, Clinical and

Operational Analysis

Actuarial Science

Analytics Governance

Opportunity – New Platform

12

In late 2010, Blue KC took control of our

analytic future and developed an analytics

solution strategy to…

•reduce dependency on packaged solutions

•lower total cost of ownership for analytics

•create an advanced, comprehensive solution

…and as a result, enable Blue KC and it’s subsidiary

companies with capabilities that creates a strategic

advantage.

Action – Platform Ingredients

13

This new approach entailed building a comprehensive,

integrated analytic solution from the ground up

The Ingredients:

• Internal department dedicated to analytic solutions

• External expertise in designing analytic solutions and retail analytics

• Internal and external data from EDW and consumer sources

• Best-in-class DW appliance for scalability and performance

• Best-in-class BI application for reporting, visualization, dash boarding,

OLAP, advanced data mining

• Several industry-best analytic methods (e.g., predictive risk scores,

benchmarks, consumer data, etc.)

• Several proprietary analytic methods (e.g., propensity to buy, re-

admission propensity, back surgery propensity, etc.)

Result - Platform

15

Though new total cost of ownership was justified on administrative savings alone, the real win is that the new platform enables Blue KC to be proactive in advanced analytics, creating new business value

• Cost-of-care Savings: identification of trends and tend drivers

• Profit Generation: target marketing for health and ancillary

• Program Validation: program effectiveness evaluation

• Intelligence in Healthcare Reform Era: predict consumer behavior

“Know Customers or No Customers”

Conclusion - Guiding Principles

People - Who we are

• Positive

• Accountable

• Qualified

Process - How we do it

• Enabling

• Efficient

• Understood

Products - What we do

• Accurate

• Actionable

• Fast